Rib-X Lands $67.5 Million To Advance Antibiotic Drug Research

Rib-X Pharmaceuticals, a New Haven biotech company with 40 employees, announced Thursday that it closed on $18.7 million in venture capital and private equity financing, the first phase in $67.5 million planned sales of preferred stock.

The second phase is anticipated to close around the end of the year.

Mark Leuchtenberger, president and CEO, said the company decided not to have an initial public offering in May, which aimed to net the same amount of cash as this financial round, because market conditions for biotech IPOs have been very difficult.

"Very few have been able to finish inside the range they announced," Leuchtenberger said, with most having a 50 percent cut or greater from their intended price. At that point, Rib-X intended to sell shares between $6 and $7, a 50 percent cut from its first prospectus.

Rib-X, which has received about $200 million from investors over the last dozen years, needed the money to advance delafloxacin, an advanced antibiotic, into Phase 3 trials. The first Phase 3 trial is slated to begin sometime in the next seven months, and cost roughly $33 million. The drug would have to complete a second Phase 3 trial before being submitted to the FDA for approval.

Delafloxacin is designed to treat acute bacterial skin infections, the most well-known is called MRSA, an infection generally acquired in hospitals. Currently, those infections are mostly treated with an IV antibiotic regimen; delafloxacin is being developed in both IV and oral forms. If patients could move from the IV treatment into the hospital to pills at home, it could reduce the length of hospital stays, he said. There is one antibiotic that also has an IV to oral formulation that's already approved, but Leuchtenberger said it works against fewer types of infections than delafloxacin should be able to fight.

In trials so far, the drug showed promising results in treating pneumonia and bronchitis, as well as the skin infections.

Vatera Healthcare Partners, a venture capital firm that is a new investor in Rib-X, is now the majority shareholder, he said, but he declined to specify its ownership share.

He said the passage of the GAIN law, which means the drug would have 10 years guaranteed exclusivity rather than five, made this investment possible. Because antibiotics are not as expensive as some other drugs, and because it takes so many hundreds of millions to create a new drug, the chance for a return on investment is much better if there will be no generic competition for the extended time.

"Vatera's very excited about the chance to make a difference in the antibiotic world," he said.

The company has another drug, radezolid, which is also as advanced in clinical trials as delafloxacin, but the company is not focusing on moving it forward currently.

Rib-X will probably need to add staff in 2013, he said, but he said the company will outsource clinical research management. "You can run a more streamlined operation than you used to," he said, as the biotech field has changed.

Rib-X also has a license agreement with pharmaceutical giant Sanofi, which paid the company $22 million through March 31 of this year for research milestones for a development program in pre-clinical testing. It's eligible for tens of millions more in payments as research progresses.